Objectives

Question 1

Short-Term Capital Preservation

Answer 1

Money-Market Instruments

• Money-market mutual funds
• T-bill
• Bankers’ acceptances
• Commercial paper
• For investors in a high tax bracket:
- Municipal notes (RAN, BAN, etc.)

Question 2

Safety

Answer 2

Low Credit Risk

• U.S. Treasury
• Agency debt
• Investment-grade corporate and municipal debt

Question 3

Tax-Advantaged Investments

Answer 3

High Tax Bracket

• Tax-exempt income
- Municipal bond
• Tax-deferral
- Annuities
- IRA and retirement plans
- Education savings plans
• Tax credits/deductions
- DPPs/limited partnerships

Question 4

Aggressive Growth or Income

Answer 4

High Risk, High Reward

• High-yield bond
• Sector fund
• CM support/companion tranche
• Business development company (BDC)
• Wildcatting limited partnership (DPP)
• Raw land limited partnership (DPP)
• Small/micro-cap stocks and funds

Question 5

Speculation

Answer 5

Active, short-term speculation

• Option strategies
• Leveraged ETF
• Short stock positions